TCF Bank 2012 Annual Report Download - page 92

The table below summarizes TDR loans that defaulted during the years ended December 31, 2012 and 2011, which were
modified within one year of the beginning of the respective reporting period. TCF considers a loan to have defaulted when it
becomes 90 or more days delinquent under the modified terms, has been transferred to non-accrual status subsequent to the
modification or has been transferred to other real estate owned.
For the Year Ended December 31,
2012 2011
(Dollars in thousands) Number of Loans Loan Balance(1) Number of Loans Loan Balance(1)
Consumer real estate:
First mortgage lien 62 $ 10,007 147 $ 26,693
Junior lien 25 1,221 42 4,934
Total consumer real estate 87 11,228 189 31,627
Commercial real estate 21 41,027 5 32,161
Total defaulted modified loans 108 $ 52,255 194 $ 63,788
Total loans modified in the applicable period 2,383 $575,014 2,017 $482,197
Defaulted modified loans as a percent of total loans
modified in the applicable period 4.5% 9.1% 9.6% 13.2%
(1) The loan balances presented are not materially different than the pre-modification loan balances as TCF’s loan modifications generally do not forgive principal amounts.
Consumer real estate TDR loans are evaluated
separately in TCF’s allowance methodology. Impairment
is generally based upon the present value of the expected
future cash flows or the fair value of the collateral less
selling expenses for fully collateral-dependent loans. The
allowance on accruing consumer real estate TDR loans
was $82.3 million, or 17.2% of the outstanding balance
at December 31, 2012, and $58.3 million, or 13.5% of the
outstanding balance at December 31, 2011. For consumer
real estate TDR loans, in 2012 TCF utilized average
re-default rates ranging from 10% to 25%, depending on
modification type, in determining impairment, which is
consistent with actual experience. Consumer real estate
loans remain on accruing status upon modification if they
are less than 150 days past due, or six payments owing,
and payment in full under the modified loan terms is
expected. Otherwise, the loans are placed on non-accrual
status and reported as non-accrual until there is sustained
repayment performance for six consecutive payments,
except for loans discharged in Chapter 7 bankruptcy and
not reaffirmed, which permanently remain on non-accrual
status for the remainder of the term of the loan. All
eligible loans are re-aged to current delinquency status
upon modification.
Commercial TDR loans are individually evaluated for
impairment, based upon the present value of the expected
future cash flows or the fair value of the collateral less
selling expenses for fully collateral-dependent loans.
The allowance on accruing commercial loan TDR loans
was $1.5 million, or 1.0% of the outstanding balance,
at December 31, 2012, and $1.4 million, or 1.4% of the
outstanding balance, at December 31, 2011.
Impaired Loans TCF considers impaired loans to include
non-accrual commercial loans, non-accrual equipment
finance loans and non-accrual inventory finance loans,
as well as all TDR loans. Impaired loans are included in
the previous tables within the amounts disclosed as non-
accrual and the accruing loans. Accruing TDR loans that
are less than 60 days delinquent have been disclosed as
performing within the previous tables of performing and
non-accrual loans and leases. In the following tables, the
loan balance of impaired loans represents the amount
recorded within loans and leases on the Consolidated
Statements of Financial Condition whereas the unpaid
contractual balance represents the balances legally owed
by the borrowers, excluding write-downs.
{ 76 } { TCF Financial Corporation and Subsidiaries }